Sanctions for Iran outlined

WASHINGTON --With Iran defying a deadline today to halt production of nuclear fuel, the United States and three European allies are assembling a list of sanctions they would seek in the U.N. Security Council.

Eventually, punitive measures might expand to restrict travel by Iran's leaders and limit the country's access to global financial markets, according to diplomatic officials who are involved in the talks and would speak only on condition of anonymity.

Aside from the effort in the Security Council, the Bush administration is also seeking to persuade European financial institutions to end new lending to Iran. Some Swiss banks have quietly agreed to limit their lending, U.S. officials say.

Even as an agreement shapes up among the United States, Britain, France and Germany, the push for sanctions faces a high hurdle in the Security Council, given Russia and China's possession of veto power and their opposition to discussing serious punishment for Iran.

In addition, the sanctions effort could be hampered by a report to be issued today by the International Atomic Energy Agency, in which inspectors will describe only slow progress by Iran in enriching uranium.

The report, according to diplomats familiar with its contents, will describe how Iran has resumed producing small amounts of enriched uranium since temporarily stopping in the spring but has not increased the rate of production.

Furthermore, the report is expected to say that the purity of the enrichment would not be high enough for use in nuclear weapons but only for power plants. Iran has long insisted its work is for peaceful uses only.

"The big question is why they appear to be moving so slowly," said one European official who has been involved in monitoring Iran's progress. One explanation, he said, is that Iran does not want to escalate the confrontation with the Security Council.

Other explanations, offered by some Bush administration officials, are that the country's scientists have run into technical problems or that they are hiding some of their production facilities. Iran has recently restricted where international inspectors can roam and refused to allow them to see facilities that Iran has not declared to be related to its nuclear program.

The atomic agency's report is also expected to detail questions that Iran has failed to answer about suspected nuclear activities that it has declined to show to international inspectors.

European and U.S. officials say, for example, that Iran has refused to elaborate on President Mahmoud Ahmadinejad's claim this year that the country has an active research project under way using an advanced type of enrichment centrifuge that it obtained from the Pakistani nuclear scientist Abdul Qadeer Khan.

In an interview, R. Nicholas Burns, the undersecretary of state for political affairs, said that when the agency's report comes out today, the U.S. argument will focus on Iran's official refusal to stop enriching uranium despite a U.N. ultimatum.

"The only criterion that matters is whether they met the conditions that the Security Council said they had to meet," he said. "And they haven't done it."

The list of proposed sanctions, according to U.S. and European officials, would begin with low-impact measures specifically aimed at Iran's nuclear program. Those would include an embargo on the sale of nuclear-related goods to Iran, the freezing of overseas assets and a ban on travel for Iranian officials directly involved in the program.

U.S. officials expect the debate within the Security Council to take weeks, and say it could extend through the opening of the U.N. General Assembly in mid-September, an event that will include a speech by President Bush and meetings with other heads of state. The administration is preparing to use those meetings to press for the sanctions resolution, just as it used the same meeting four years ago to begin to build its case for demands against Iraq.

But Russia and China, among other countries, are concerned about any U.S.-led escalation of a confrontation with Iran. Unlike the Bush administration's effort four years ago, however, U.S. officials appear to be shying away from using intelligence information to build their case. Instead, they are citing Ahmadinejad's public statements and Iran's refusal to comply with the Security Council resolution passed in July, with support from Russia and China, demanding full suspension of enrichment by today.